Wall Street Suddenly Facing Reality?

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I opened up my LA Times this morning and here’s what I read (the headline is from the print edition)

Stocks Sink As Market Fears Mount
Investors are spooked by the prospect of even modest bederal budget cuts in an anemic recovery

Two years after the last recession ended, Wall Street is showing rising fear that the U.S. economy could be headed for a new downturn….Despite some relief that Washington could forge an eleventh-hour compromise on the debt ceiling, analysts said the prospect of even modest federal budget cuts in an anemic economy was spooking markets.

“Investors are looking past the budget situation and realizing this is an austerity plan,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. “We have an economy that’s struggling to stay afloat and we don’t have the ammunition to keep prodding it forward.”

Oh really? Now you tell us?

There are really only two options here. (1) The Times is wrong. (2) The Times is right and America has the stupidest goddamn investors on the planet. For months they sat around cheering on the tea partiers and declaring solemnly that the federal budget was just like a household budget and we needed “real action” on the debt in order to build confidence in the economy. Then, suddenly, when they got it, they realized that what they really wanted wasn’t dumb slogans but actual policies that would help spur the recovery. And that means looser monetary policy and fiscal stimulus.

So which is it? Has Wall Street really been sitting idly by during the whole debt ceiling debacle and has only now realized what it really means? Can they really be so steeped in the Fox News fantasyland that it never occurred to them until now that cutting federal spending during an economic downturn wasn’t really a great idea? Seriously?

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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